From Satisfied Customer to Raving Fan

Enthusiasm is contagious.  Just ask the teammates of a someone like the Colts' Peyton Manning.  Or look at how the Net Promoter Score is calculated.  Indifference won't move the needle.  Perhaps satisfaction will, but the energy of delight can do wonders.  The best term that I've come across for enthusiastic customers is the "raving fan."

With customer-centric strategies, hundreds of companies are creating value through innovation that creates raving fans.  This goes beyond customer service however.  And these are not necessarily technological breakthroughs. This is business model innovation that provides real value to customers.  Customer centric strategies are commercial successes that enhance the user experience and delight customers while augmenting the supplier's bottom line.

An example:
The Situation:
A customer experience that results in indifference is a lost opportunity in my mind.  I am a customer of AAA auto and they recently asked me to provide them with feedback.  The first question I got was the NPS of course (Full disclosure: I gave them a 6).  My only interaction with the company during the last two years was renewing my annual membership.  The experience of receiving an email notification for my loyalty was chock full of indifference. Isn't my loyalty worth more than a receipt?

The Innovation:
Why not turn this humdrum interaction into an exciter? Innovate on the renewal transaction with a congratulatory package that delights the customer.  To my mind, this might come in a couple of flavors: A letter highlighting how many times the customer used AAA and avoided being stranded on the roadside.  A travel guide on the customer's local area to help them discover new attractions such as hiking trails or historic sites.  The cost of either of these could be offset by including targeted marketing programs for add-on services or advertisements.

Would I jump up-and-down because of this? Not likely. But it would change my NPS response.  When was the last time a web-based renewal gave you a memorable experience?

(Note: See McGrath & MacMillan for more on exciter product features).

Customer Nutrition

What are your customers hungry for?  Do they come to you for food, or are they looking for nutrition?

This WSJ article highlights the effort of some Food Retailers to implement health-scoring systems in their stores.   Shoppers have been seeking satisfied stomachs from their grocery stores for years. Now, they're  seeking health as well.

Food products are the means not the end.  This is customer-centricity at its core and retailers like Kroger, Hy-Vee and Meyer are on the right track.

It is a brilliant extension of value to consumers along a new dimension.  Why sit passively as a storefront when you can create an interchange with a customer?  These grocers are getting out of the commoditization death spiral. They're no longer simply shelf space for the Kellogg's and Nestle's of the world.  The grocers are taking control of the customer experience with this new dimension.  They're also likely to build loyalty.


What are the key factors influencing a grocery shopper's choice of supermarket?

• Convenience - Good Location, Speedy Shopping
• Selection
• Quality
• Prices
• Aspirational qualities - Brand, Look & Feel of store

Now let's add a social and informational component to the value equation: Learning nutritional information.

What this does is accelerate the consumer trend towards health foods and away from empty calories.  With an eye towards leading customers with a valuable information exchange, these grocers are positioning themselves to build lasting bonds with their consumers as an enabler on leading trends.  By shopping at these stores, the consumer becomes more knowledgeable in an area of increasing relevance and importance.  This is a value exchange that goes beyond price stickers the cash register.

Intuit's Taxcaster

A parallel example of adding a value dimension comes from Intuit's TurboTax. Kings of designing the user experience around customers, Intuit included a "Scoreboard" in its software about two years ago.  With  "taxcaster", one can see how data entered in the software results in higher deductions or smaller tax bills.

The concept provides an interaction, a dialog, a level of engagement, that enhances the user experience.  This essentially expands the benefits of the tax prep software. In this case, if getting your taxes filed is food, then excitement is nutrition.

The Selling Process: Integral to Positive Customer Experience

How do you want to be sold to?  It depends a lot on what you're buying doesn't it?  In fact, can you really separate the selling process from the overall product experience?  

A salesperson  is the ambassador for your company, and what goes on in the field has a lasting impact on the overall perception of your business in the marketplace. Certainly those front-line sales persons have a big impact on a customer's purchasing decision.  It goes well beyond this though.  

A good salesman captures the essence of the product or service.  He relates the benefits beautifully. He is selling himself.  He is part of the brand and he's part of the product.  

The McKinsey Quarterly's latest edition features an article on the drivers of the sales experience, Basics of B2B Sales Success. Their survey focuses on the tactical; it nicely relates back into the strategic overall customer experience.  Which features of the selling process are the most influential to the customer?  (a) too much contact (b) lack of product knowledge, (c) lack of understanding of customer's needs, (d) selling style.

From the customer's point of view, the sales process is just one touch-point in the overall experience with an offering.  The classic Consumption Chain tool (below) shows this succinctly.  Transacting with customers is simply a link in the workflow as a customer interfaces with a supplier.  Its an essential function however, and it often carries a very high weighting of importance for customers.  

McKinsey gets one thing spot on: Relating product knowledge is just critical when it comes to care-abouts during the transaction process.  This knowledge is typically forward looking in terms of the consumption chain.  For example, take the purchase of office furniture.  A buyer would rely on the salesperson to augment their understanding of each of the links post-transaction. As the customer steps through the chain, they both receive benefits and incur costs.  What will happen during the process to receive  the chairs & tables, move the products through the office?  How will employees use & experience the furniture, and how will faulty equipment be handled? 

The purpose of this type of knowledge in the sales process is to set expectations. Mis-steps in expectations along these lines will almost certainly lead to unhappy customers and quickly minimize the chances of future business.

Top 5 Subjects to Cover in a Customer Meeting

What do you want?
How much do you want?
When do you want it?
What do you want to pay?
What can we do to get you to buy more?

These five questions are NOT the topic of this post. And setting aside sales calls, these shouldn't even be on the agenda of a customer visit.

I had the chance to meet with the CFO of a promising pre-revenue start-up this past week.  He's talking to potential beta customers, relaying the concept, looking for ways to deliver value and ultimately monetize.  To make the most of the time spent with customers, it is a great idea to be open to sharing information as well as listening to what the customer has to say.  A mutual exchange is valuable in developing a fruitful relationship.

Here are thoughts on five subjects that should be on the agenda:

1. Offer insight on the customer's business.  Rivalry and competition is a great topic. Armed with basic knowledge of a customer's product and marketplace, provide thoughts on the competitive landscape.  If competition is fierce, find out where a supplier can chip-in to push a customer ahead of its rivals.
2. Describe the way that you do business. When a customer knows what's important to you, what the baseline level of service is, this anchors the customer's expectations.  It also is a quick way to get feedback. How does the customer define ease of business?
3. Cover hiring and organizational capability. What are your people really good at?  The value of most businesses lands firmly in the hands of its people.  Find out what the customer believes they have as core skills.  Further, learning where the customer is hiring can provide good insight for future potential business.
4. Describe your corporate goals.  Provide insight into the business goals that you've set for your company. If you've just secured funding, sharing the exciting back and forth with investors is something that everyone will be interested in.  On the other hand, if you're established, what's next and what's the end goal for your enterprise?
5. Listen for the goals of the customer. Dealing with an R&D team as a customer is totally different than selling to sales people.  Look beyond your product. What do they want to get done and how do their department goals fit in with the broader company's intent.

Subjects of conversation such as these can lead to solid dialog between supplier and customer.  Use the customer visit as an event that seeks to obtain the customer's long-term involvement in your business.

Leadership as a Customer Relations Function

Your customers are sheep. They are seeking leadership in one form or another from their suppliers.  Yet the normative mood that pervades business encounters where profits are on the line is summarized with the saying “the starting point for a customer is to distrust you immediately."  

Distrust is a friction to the relationship that must be overcome before the customer considers entering into a value exchange.  Allaying the perceived risk and creating a beneficial relationship requires leadership to put the customer first and relay the supplier’s essential needs to customers.  

A customer segment of leeches is often found inside a company’s customer base.  These creatures consume more resources than they pay for. To avoid these relationships and avoid later confrontations such as the “firing” of a customer, a supplier can take steps to position their own priorities that must be met in order to have successful relationships as a matter of policy.  Gaining acceptance from the customer to respect the supplier’s priorities may prove difficult if the supplier is in a position of weakness.  Conversely, the supplier should seek to be in a leadership position along a given dimension with customers.  A leading vision from the supplier may take the form of technology, thought, cost or intimacy leadership. 

The essence of personal or firm-wide leadership is built on the unique resources and capabilities of the firm.  At some companies, decades of innovative product development is the basis for a technology leadership position.  At other firms, a strategy of operational excellence to provide the lowest cost offering provides the basis of leadership.  And for new start-ups, often focus is the path forward.  A solution that is tailored for a specific niche can give a leg-up to a new firm.  

It is essential to market a unique position in the marketplace.  This is the essence of brand equity and it lays the groundwork for creating customer relationships.

How Do Customers Want to be Treated By Their Suppliers?

I write in this blog about creating a customer-centric company.  I write to an intended audience of suppliers. My point of view is from the inside of a supplier looking out to customers.  Is this the perspective that is needed understand managing a customer-focused organization?
I was inspired when I watched the below short from a London Business School professor.  Julian Birkinshaw @ LBS on Innovative Management Design Flaws  He correctly states that the field of managements is taught from the perspective of managers.  What should managers to do influence, to enforce, to inspire, to guide employees?  These are the questions for which answers are posed inside MBA classrooms and in large companies.    
Birkinshaw goes on to identify this as a "design flaw", suggesting that this paradigm should be flipped on its head.  Take the employee's point of view.  In what way would the employee prefer to be commanded, to be controlled?
By parallel reasoning, the question for leading an organization toward success with customers may be best answered by turning the compass.  How does the customer want to be sold to, to receive goods, to be billed, to learn about your offering?
This mindset means being open to embracing the customer experience by looking inward. Instead of starting with what you can do to for the customer, begin with the needs and best interests of customers in mind.  Like employees to managers, customers are stakeholders in the success of your company's success.   You must serve them to enable their high performance, which in turn propels you to your desired outcome.

Customer Intimacy 2.0 @ Amazon.com – How Leading New Economy Businesses Handle Customer Intimacy

Amazon.com is a business driven towards scale. Since its inception as the world’s biggest book store, Amazon leveraged its size to drive breadth and, above all, low cost for its consumers. While Apple (as discussed previously) pursues the classic differentiation strategy, Amazon is a classic low-cost player.

Amazon's traditional book selling business has three touch points with customers. 

1. The first is virtual, where folks surf around in their web browsers for inventory. 
2. The second interaction is at the checkout transaction or “shopping cart”; 
3. The third is upon opening the box that a customer has ordered. 

Is there any room for customer intimacy?  Upon closer look, I see the virtual realm chocked-full of chances to entertain, listen and react to customers. Amazon thoroughly tracks and customizes the user experience. This is a tremendous capability for the business and adds huge values to customers as well.

By comparison, how often do brick & mortar retailers undertake customer intimacy in the three user links mentioned above (searching for product, checkout and delivery)? Rummaging around a store for products is likely to be constrained by the physical location of inventory. Obviously not true on amazon.com. Further, could most retailers present you with a basket of recommended items right when you walk in? Amazon’s recommended list does this. 

At checkout, Amazon has what every business would love to have in its CRM. At this stage, they’ve remembered your payment preference and where you’ve received products in the past. Even the delivery is a tailored experience for the customer. One-touch simplicity allows customers to avoid having to lug home a huge box. Lastly, the breadth of products certainly reflects an aspect of customer intimacy. In this regard, the user has an almost limitless opportunity to purchase a wide variety of goods in one place. 

In all, customer intimacy isn’t happening the way it used to. New business models and digitization of interactions offer new ways for businesses to mesh with customers. The increasing complexity is daunting. Leaders like Amazon and Apple have untangled the complexity and are controlling it to their advantage.

Customer Intimacy 2.0 @ Apple – How Leading New Economy Businesses Handle Customer Intimacy

Is Apple’s strategy based on listening to its customers? How about that of Amazon.com? Neither of these companies is traditionally seen as being customer intimate. There aren’t any sales reps out there developing deep relationships with customers, but there are other ways to be customer intimate. Both Apple and Amazon strive to maximize their understanding of how customers use their products. They’ve built big, loyal customer bases.

Apple is built on the design instincts of Steve Jobs, and the company strives to have the easiest to use, most elegant products wherever it plays. In the traditional sense of strategy, Apple is a differentiator. Look at the company’s envoys into retail however, which is a customer-intimacy-enabling play.

Smartly, the Apple stores align with the traditional strategy of the company: the stores are just as differentiated as the product. Elegance is the best word to describe both the iPod and the company’s flagship Manhattan store. 

Apple’s stores serve two purposes for customer intimacy. The first is simply a control issue, wherein a competitive advantage stems from access to point of sale information in-house and oversight of the people/place that customers interact with salespeople. Second, the stores’ Genius Bars offers Apple a chance for personal connection. Customers can get their products fixed, learn about the technology or gain customizations that are tailored for what they want to get done with the products. The Apple store offers a retail angle on intimacy, and I suspect that the stores allow Apple to learn a great deal about how customers are using its products.

Further, Apple’s increasing ownership of the functionality on its iPhone platform. Playing the game of its rival, Apple is rumored to be replacing Google’s mapping features for mobile. Collecting the data directly from users in this key function offers greater insights into customer behavior.

In all, customer intimacy isn’t happening the way it used to.  Apple has a unique strategy here for getting close to customers, providing value and extracting insights for upcoming generations of products.

Customer-Centricity Inside and Out: at In-n-Out

I was lost in a moment of blissful high-calorie delight. I realized that there was nothing that I could complain about as I worked my way through a "Double-Double". It got me thinking about the fantastic business that the operators of In-n-Out have created.

The burger joint creates a simply phenomenal experience for its customers on the inside and out. It does so with leadership--in its quality product and in its exceptional operational focus--to align the concept with what customers want.  And importantly, the franchise doesn't try to be all things to all people.

In-n-Out leads with what is inside (the food) because the concept utilizes high quality ingredients that are fresh and never frozen. This is a huge differentiator for the restaurant in a sea of reheated fast-food vendors. Its potatoes for fries are cut right in the store every hour, the hamburger is ground in store every day.

High standards extend outside, where employees go out into the drive-through line to take orders from customers at their cars. Doing so speeds up customer turns. Faster service leads to quicker eating and this leads to happier customers.

The company knows which customers it is looking to serve and serves them well. Building on its proposition to offer a high-quality quick-serve meal, the menu’s focus is limited. A potential disadvantage then flips into a unique advantage.  The basic ingredients can be combined into pretty much anything you can imagine, even if its not listed on the menu. The franchise has embraced this flexibility with a ‘secret menu’. In all, customers can take a pleasure in the food and don’t have put up with low service or long waits.

In-n-Out also makes a conscious choice to keep certain customers outside. The limited, burger-centric menu does not include low-calorie or any vegan/vegetarian options on the menu (a big deal in California). Adding grilled chicken, tofu veggie burgers or salads might be answers to reach more customers, but the company has decided against it. One potential reason could be the avoidance higher complexity operations that would conflict with speed of service.  In-n-Out keeps focused, with the target customer in mind and a winning formula.